Alibaba Group Holding Ltd. (BABA) has reported its most significant revenue growth since late 2023, driven by advancements in artificial intelligence (AI) and a robust e-commerce performance. For the quarter ending December 2024, the company’s revenue increased by 8% year-over-year to 280.2 billion yuan ($38.38 billion), surpassing analyst expectations. Net income reached 48.9 billion yuan ($6.71 billion), more than tripling from the previous year.
In response to these strong financial results, Alibaba’s U.S.-listed shares surged over 12%, closing at $135.97. The stock has experienced a 60% increase since the beginning of the year, reflecting growing investor confidence.
CEO Eddie Wu attributed the company’s success to its “user-first, AI-driven” strategy and announced plans to “aggressively invest” in AI and cloud computing infrastructure over the next three years. These investments are expected to exceed the company’s total spending in these areas over the past decade. Wu emphasized that the pursuit of artificial general intelligence (AGI) is Alibaba’s primary objective, aiming to develop models that extend the boundaries of intelligence.
Alibaba’s core domestic e-commerce platforms, Taobao and Tmall, reported a 5.4% increase in sales to 136.09 billion yuan, with customer management revenue rising by 9%. The cloud-computing unit saw a 13% increase in sales to 31.74 billion yuan, while the international commerce unit experienced a 32% surge in revenue to 37.76 billion yuan, driven by strong performance in cross-border businesses.
The company’s focus on AI has led to significant developments, including the unveiling of its latest Qwen AI models, which have performed well in benchmark tests. Additionally, Alibaba is collaborating with Apple to integrate its AI technology into iPhones for the Chinese market.
These strategic moves come amid a renewed interest in China’s technology sector, highlighted by a recent meeting between President Xi Jinping and prominent entrepreneurs, including Alibaba co-founder Jack Ma. This development has bolstered investor confidence, contributing to the substantial rise in Alibaba’s stock price this year.
